An automatic-adjustment clause is a provision found in utility-rate schedules that allows public utilities to increase their rates without needing a public hearing or state review. This increase is only permitted when specific operating costs, such as fuel prices, rise. The purpose of this clause is to help stabilize utility revenues in response to fluctuating costs that the utility incurs regularly.
This term is primarily used in the context of utility regulation and public utility law. It is relevant in legal practice areas that involve energy, water, and other public services. The automatic-adjustment clause is significant for utility companies as it provides a mechanism to adjust rates in response to changing costs without the lengthy process of public hearings. Users can manage related forms and procedures through resources like US Legal Forms, which offers templates drafted by legal professionals.
Here are a couple of examples of abatement:
For instance, if a utility company experiences a significant rise in fuel costs, the automatic-adjustment clause allows them to increase their rates accordingly without a public hearing. This ensures that the utility can maintain its financial stability while responding to market changes. (Hypothetical example)
Examples of state differences (not exhaustive):
| State | Adjustment Process | Public Notification Requirements |
|---|---|---|
| California | Requires notification to the Public Utilities Commission. | Public notification is mandatory. |
| Texas | Allows adjustments with less regulatory oversight. | No public notification required. |
| Florida | Requires a review process for adjustments. | Public notification is required. |
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
| Term | Definition | Difference |
|---|---|---|
| Rate Adjustment Clause | A provision allowing periodic rate changes based on predetermined criteria. | Automatic-adjustment clauses are typically triggered by specific cost increases. |
| Fuel Adjustment Clause | A specific type of rate adjustment clause focused on fuel cost changes. | Fuel adjustment clauses are narrower in scope, only addressing fuel costs. |
If you are affected by a utility rate increase due to an automatic-adjustment clause, consider the following steps:
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| Attribute | Details |
|---|---|
| Typical Fees | Varies by utility and state regulations. |
| Jurisdiction | State public utility commissions. |
| Possible Penalties | Non-compliance with notification requirements may lead to fines. |
It is a provision in a utility-rate schedule that allows for rate increases based on specific cost increases without public hearings.